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Should You Take Comfort From Insider Transactions At Southside Bancshares, Inc. (NASDAQ:SBSI)?

Simply Wall St

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Southside Bancshares, Inc. (NASDAQ:SBSI).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Southside Bancshares

Southside Bancshares Insider Transactions Over The Last Year

insider Tony Morgan made the biggest insider purchase in the last 12 months. That single transaction was for US$62k worth of shares at a price of US$31.15 each. That implies that an insider found the current price of US$33.73 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Southside Bancshares insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 6023 shares worth US$194k. Southside Bancshares insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:SBSI Recent Insider Trading, September 11th 2019

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Southside Bancshares Have Bought Stock Recently

It's good to see that Southside Bancshares insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$54k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership of Southside Bancshares

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 6.3% of Southside Bancshares shares, worth about US$72m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Southside Bancshares Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Southside Bancshares we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Southside Bancshares, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.